1675 パラジＥＴＦ 2019-04-01 10:00:00
平成30年12月期 決算短信（平成30年1月1日～平成30年12月31日） [pdf]
平成30年12月期 決算短信（平成30年1月1日～平成30年12月31日)
平成31年4月1日
上場取引所 東京証券取引所
銘柄名 コード番号 連動対象指標 主要投資資産 売買単位
ETFS金上場投資信託 1672 金価格 金 1
ETFS銀上場投資信託 1673 銀価格 銀 10
ETFS白金上場投資信託 1674 白金価格 白金 1
ETFSパラジウム上場投資信託 1675 パラジウム価格 パラジウム 1
ETFS貴金属バスケット 金・銀・白金・
上場投資信託
1676 貴金属バスケット価格（注） パラジウム
1
（注） 貴金属バスケット価格は、金価格、銀価格、白金価格、パラジウム価格に基づいて算出されます。
なお、ETFS貴金属バスケット上場投信の一口当たりの貴金属は、およそ0.04ファイン・トロイ・
オンスの金、およそ1.2トロイ・オンスの銀、およそ0.01トロイ・オンスの白金、およそ0.02ト
ロイ・オンスのパラジウムの合計です。
外 国 投 資 法 人 イーティーエフエス・メタル・セキュリティーズ・リミテッド
代 表 者 名 ヒラリー・ジョーンズ
管 理 会 社 ETFセキュリティーズ・マネジメント・カンパニー・リミテッド
https://www.wisdomtree.eu/en-gb/resource-library/prospectus-and-regulatory-reports#tab-2A942D42-5AA1-4008-9080-3C2DADB050A7
代 表 者 名 ヒラリー・ジョーンズ
問合せ先責任者 ＴＭＩ総合法律事務所 （中川秀宣） TEL 03-6438-5660
有価証券報告書提出予定日 平成31年6月28日提出(予定）
分配金支払い開始予定日 該当なし
Ⅰファンドの運用状況
1. 2018年12月決算期の運用状況（平成30年1月1日～平成30年12月31日）
(1)資産内訳 （百万円未満切捨て）
主要投資資産 合計（資産）
構成比
金額 金額 構成比
百万円 ％ 百万円 ％
ETFS金上場投資信託 2018年12月決算期 741,824 (100) 741,824 (100)
2017年12月決算期 690,387 (100) 690,387 (100)
百万円 ％ 百万円 ％
ETFS銀上場投資信託 2018年12月決算期 87,639 (100) 87,639 (100)
2017年12月決算期 108,994 (100) 108,994 (100)
百万円 ％ 百万円 ％
ETFS白金上場投資信託 2018年12月決算期 24,213 (100) 24,213 (100)
2017年12月決算期 40,090 (100) 40,090 (100)
百万円 ％ 百万円 ％
ETFSパラジウム上場投資信託 2018年12月決算期 10,963 (100) 10,963 (100)
2017年12月決算期 14,770 (100) 14,770 (100)
百万円 ％ 百万円 ％
ETFS貴金属バスケット 2018年12月決算期 11,353 (100) 11,353 (100)
上場投資信託 12,585 (100) 12,585 (100)
2017年12月決算期
（注） 主要投資資産は、平成31年3月12日午前零時（ロンドン時間2019年3月11日午後4時）現在のものとしてブルームバーグに
よって表示される為替レート（スポット・レート）（1米ドル＝111.205円）に基づいて円換算しています。(以下同じ）
(2)設定・償還実績
前営業期間末 設定口数 償還口数 当営業期間末
発行済口数 発行済口数
(①) (②) (③) （①+②-③）
千口 千口 千口 千口
ETFS金上場投資信託 2018年12月決算期 49,889 14,854 10,337 54,406
2017年12月決算期 48,107 20,794 19,012 49,889
千口 千口 千口 千口
ETFS銀上場投資信託 2018年12月決算期 61,238 31,945 39,215 53,969
2017年12月決算期 54,332 36,434 29,528 61,238
千口 千口 千口 千口
ETFS白金上場投資信託 2018年12月決算期 4,091 1,143 2,334 2,900
2017年12月決算期 3,704 2,525 2,138 4,091
千口 千口 千口 千口
ETFSパラジウム上場投資信 2018年12月決算期 1,309 187 667 829
託 2017年12月決算期 3,208 384 2,283 1,309
千口 千口 千口 千口
ETFS貴金属バスケット 2018年12月決算期 1,154 84 194 1,044
上場投資信託 2017年12月決算期 1,337 137 320 1,154
（注） 上記の設定・償還実績については、営業期末時点の未決済上場投信を含んでいません。
(3)基準価額
売買単位当たり基準価額
（注）
総資産 負債 資産 （（③/当営業期間末
発行済口数）×売買単位）
百万円 百万円 百万円 円
2018年12月決算期 741,824 - 741,824 13,634
ETFS金上場投資信託
2017年12月決算期 690,387 - 690,387 13,838
百万円 百万円 百万円 円
2018年12月決算期 87,639 - 87,639 16,238
ETFS銀上場投資信託
2017年12月決算期 108,994 - 108,994 17,798
百万円 百万円 百万円 円
ETFS白金上場投資信 2018年12月決算期 24,213 - 24,213 8,348
託 40,090 40,090 9,798
2017年12月決算期 -
百万円 百万円 百万円 円
ETFSパラジウム上場 2018年12月決算期 10,963 - 10,963 132,167
投資信託 2017年12月決算期 14,770 - 14,770 112,784
百万円 百万円 百万円 円
11,353 11,353 10,873
ETFS貴金属バスケッ 2018年12月決算期 -
ト上場投資信託 2017年12月決算期 12,585 - 12,585 10,900
（注1） 売買単位は、金、白金、パラジウム及び貴金属バスケットについては1口、銀については10口となります。
（注2） 貴金属証券の一単位当たりの資産は、証券1単位当たりの基準価額に基づいたものとなっています。証
券1単位当たりの基準価額は、相応する証券1単位当たりの貴金属エンタイトルメントに対応する値決め
による価格を乗じたものとなります。各々の類型の貴金属にかかる証券の裏付けとなっている貴金属ご
との総価値は、相応する証券の残高と等しくなります。このために、純資産額は零となり、総資産額は、
は、証券の裏付けとなる貴金属の総額と等しくなります。
［参考］外国投資法人の財政状態
総資産額 総負債額 投資主持分額
百万円 百万円 百万円
2018年12月決算期 959,124 960,220 -1,095
2017年12月決算期 934,831 935,673 -842
(注1) 貴金属証券は、期限の定めのない、請求権の限定されている発行体による債務です。全出資口は、親会
社であるイーティーエフ・セキュリティーズ・リミテッドにより保有されています。投資主持分額は、
総資産額から総負債額を差し引いたものです。
2. 会計方針の変更
① 会計基準等の改正に伴う変更 有・無
② ①以外の変更 有・無
ご参考： 会計基準等の改正
以下の新規及び改訂後の基準ならびに解釈指針が当年度に適用されました。但し、当財務諸表に影響を与えた可能性は軽微
でした。
・ IFRS第9号「金融商品」
・ IFRS第15号「収益」
IAS第39号では、金属証券および金属地金は純損益を通じて公正価値で測定する金融商品として指定され、貸付金および債権
は償却原価で測定されていました。 IFRS第9号の適用後、当社が保有する金融資産または金融負債の分類または測定に変更
はありません。
ETFS Metal Securities Limited
Registered No: 95996
Report and Financial Statements for the
Year ended 31 December 2018
ETFS Metal Securities Limited
Contents
Management and Administration 1
Directors’ Report 2-6
Statement of Directors’ Responsibilities 7
Independent Auditor’s Report 8-12
Statement of Profit or Loss and Other Comprehensive Income 13
Statement of Financial Position 14
Statement of Cash Flows 15
Statement of Changes in Equity 16
Notes to the Financial Statements 17-27
www.wisdomtree.eu
ETFS Metal Securities Limited
Management and Administration
Directors Administrator
Gregory Barton R&H Fund Services (Jersey) Limited
Steven Ross Ordnance House
Peter Ziemba PO Box 83
Hilary Jones 31 Pier Road
St Helier
Jersey, JE4 8PW
Registered Office Registrar
Ordnance House Computershare Investor Services (Jersey) Limited
31 Pier Road Queensway House
St Helier Hilgrove Street
Jersey, JE4 8PW St Helier
Jersey, JE1 1ES
Manager Trustee
ETFS Management Company (Jersey) Limited The Law Debenture Trust Corporation plc
Ordnance House Fifth Floor
31 Pier Road 100 Wood Street
St Helier London, EC2V 7EX
Jersey, JE4 8PW United Kingdom
Custodian Swiss Gold Custodian
HSBC Bank plc JP Morgan Chase Bank, NA
8 Canada Square London Branch
London, E14 5HQ 125 London Wall
United Kingdom London, EC2Y 5AJ
United Kingdom
Auditor Jersey Legal Advisers
KPMG Channel Islands Limited Mourant Ozannes
37 Esplanade 22 Grenville Street
St Helier St Helier
Jersey, JE4 8WQ Jersey, JE4 8PX
Company Secretary
R&H Fund Services (Jersey) Limited
Ordnance House
31 Pier Road
St Helier
Jersey, JE4 8PW
-1- www.wisdomtree.eu
ETFS Metal Securities Limited
Directors’ Report
The directors of ETFS Metal Securities Limited (“MSL” or the “Company”) submit herewith the annual report
and financial statements of the Company for the year ended 31 December 2018.
Directors
The names and particulars of the directors of the Company during and since the end of the financial year are:
Gregory Barton (Appointed 11 April 2018)
Christopher Foulds (Resigned 2 November 2018)
Steven Ross
Joseph Roxburgh (Resigned 11 April 2018)
Graham Tuckwell (Resigned 11 April 2018)
Peter Ziemba (Appointed 11 April 2018)
Hilary Jones (Appointed 2 November 2018)
Directors’ Interests
No director has an interest in the Ordinary Shares of the Company as at the date of this report.
Prior to the change in ownership (described below) Graham Tuckwell held an interest in the Ordinary Shares
of the Company as the majority shareholder of ETFS Capital Limited (formerly ETF Securities Limited).
Principal Activities
The Company’s principal activity is the issue and listing of metal securities (“Metal Securities”). Metal
Securities allow investors to gain exposure to the precious metals market without needing to take physical
delivery of platinum, palladium, silver and gold bullion (“Metal Bullion”). It also allows investors to buy and sell
that interest through the trading of a security on the London Stock Exchange and any other exchange to which
that security may be admitted to trading from time to time.
A Metal Security is an undated secured limited recourse debt obligation of the Company, constituted by a trust
instrument. Under the terms of this trust instrument the Metal Securities are secured on an amount of Metal
Bullion equivalent to the Metal Entitlement of each Metal Security. This Metal Bullion is held in custody by
designated custodians or their sub-custodians and the subject of fixed and floating charges in favour of the
Trustee. Metal Bullion, once deposited, may only be removed after approval from the Trustee. A holder of a
Metal Security is entitled to require the redemption of that Metal Security and receive an amount of Metal
Bullion equal to the Metal Entitlement on the date of redemption (and subject to applicable redemption fees):
• in the case of an authorised participant or any holder of ETFS Physical Swiss Gold Securities – at any
time; or
• in the case of any other holder – only in circumstances where there are no authorised participants (or
otherwise as determined by the Company), and where the holder has an unallocated bullion account
and the holder is not an Undertaking for Collective Investment in Transferable Securities (“UCITS”).
The Company earns a management fee by reducing the Metal Entitlement of each class of Metal Security on
a daily basis by an agreed amount (the “Management Fee”). The Management Fee is received in the form of
bullion on a monthly basis (in arrears) following agreement from the Trustee.
The Company has entered into a service agreement with ETFS Management Company (Jersey) Limited
(“ManJer” or the “Manager”), whereby ManJer is responsible for supplying or procuring the supply of all
management and administration services required by the Company, (including marketing) as well as the
payment of costs relating to the listing and issue of Metal Securities. In return for these services, the Company
pays ManJer an amount equal to the aggregate of the Management Fee and the creation and redemption fees
(the “ManJer Fee”). The bullion in respect of the Management Fee is transferred by the Trustee from the
Company’s Custodian accounts directly to ManJer. In addition, the monetary amounts in respect of the
creation and redemption fees are transferred directly to ManJer and there are no cash flows through the
Company.
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ETFS Metal Securities Limited
Directors’ Report (Continued)
Review of Operations
The most recent Prospectus was issued on 17 December 2018. As at 31 December 2018, the Company had
the following classes of Metal Securities in issue and admitted to trading on the following exchanges:
London NYSE- Tokyo
Stock Borsa Deutsche Euronext Stock
Exchange Italiana Börse Paris Exchange
ETFS Physical Platinum
ETFS Physical Palladium
ETFS Physical Silver
ETFS Physical Gold
ETFS Physical PM Basket
ETFS Physical Swiss Gold - -
As at 31 December 2018, the fair value of assets under management amounted to USD 8,618.8 million
(2017: USD 8,394.8 million). The Company recognises its assets (Metal Bullion) and financial liabilities (Metal
Securities) at fair value in the Statement of Financial Position.
During the year, the Company generated income from creation and redemption fees and Management Fees
as follows:
2018 2017
USD USD
Creation and Redemption Fees 56,861 56,861
Management Fees 31,986,955 31,986,955
Total Fee Income 32,043,816 32,043,816
Under the terms of the service agreement with ManJer, the Company accrued expenses equal to the
Management Fee and creation and redemption fees, which, after taking into account other operating income
and expenses, resulted in an operating result for the year of USD Nil (2017: USD Nil).
The gain or loss on Metal Securities and Metal Bullion is recognised in the Statement of Profit or Loss and
Other Comprehensive Income in line with the Company’s accounting policy.
The Company holds Metal Bullion to support the Metal Securities as determined by the Metal Entitlement
(which is calculated in accordance with an agreed formula published in the Prospectus). Metal Bullion is
marked to fair value using the latest quote provided by the London Bullion Market Association (“LBMA”).
The Company has entered into contractual obligations to issue and redeem Metal Securities in exchange for
Metal Bullion as determined by the Metal Entitlement of each class of Metal Security on each trading day. The
Metal Bullion in respect of each creation and redemption is recorded using the price provided by the LBMA on
the transaction date.
IFRS 13 requires the Company to identify the principal market and to utilise the available market price within
that principal market. The directors consider the stock exchanges where the Metal Securities are listed to be
the principal market and as a result the fair value of the Metal Securities is the on-exchange price as quoted
on those stock exchanges demonstrating active trading. As a result of the difference in valuation methodology
between Metal Bullion and Metal Securities there is a mis-match between accounting values, and the results
of the Company reflect a gain or loss on the difference between the value of the Metal Bullion (through the
application of the price provided by the LBMA against the Metal Entitlement, referred to within these financial
statements as the “Contractual Value”) and the market price of Metal Securities. This gain or loss would be
reversed on a subsequent redemption of the Metal Securities and transfer of the corresponding Metal Bullion.
This is presented in more detail in note 7 to these financial statements.
The Company’s exposure to risks is disclosed in note 11 to the financial statements.
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ETFS Metal Securities Limited
Directors’ Report (Continued)
Going Concern
The nature of the Company’s business dictates that the outstanding Metal Securities may be redeemed at any
time by the holder and in certain circumstances may be compulsorily redeemed by the Company. As the
redemption of Metal Securities will always coincide with the transfer of an equal amount (in value) of Metal
Bullion, no liquidity risk is considered to arise. All other expenses are met by ManJer; therefore the directors
consider the Company to be a going concern.
Change in Ownership
On 11 April 2018 WisdomTree Investments, Inc (an exchange-traded product sponsor and asset manager)
acquired ETFS Capital Limited’s (formerly ETF Securities Limited) European exchange-traded product
business as a going concern, which includes the Company. Following completion of the acquisition, the
Company continues as a going concern.
Future Developments
Referendum of the United Kingdom's (“UK’s”) membership of the European Union (the “EU Referendum”)
Pursuant to the European Referendum Act 2015, a referendum on the United Kingdom’s membership of the
EU was held on 23 June 2016 with the majority voting to leave the EU. On 29 March 2017, the UK Government
exercised its right under Article 50 of the Treaty of the European Union. The UK is due to leave the EU on 29
March 2019. This departure may be subject to a withdrawal agreement between the UK and the other EU
member states which provides for a transition period lasting until December 2020 during which EU law
continues to apply to the UK as if it were a member state may take place without any transitional arrangements
in place.
The Company is domiciled in Jersey, outside of the EU, and the Commodity Securities are distributed in the
EU under the EU Prospectus Directive which requires their offering to the public to be approved by an EU
Member State regulator. To date, the Company has chosen the UK Financial Conduct Authority (“FCA”) as
its member state regulator for these purposes. Request is then made to the FCA, as the chosen Member
State regulator, for the passporting of the offering across the EU, once again, under the Prospectus Directive.
The Company is working with an alternate EU Member State regulator to obtain approval of its prospectus and
request passporting for its offering to maintain the Company's access to relevant markets post the departure
of the UK from the EU. This is hoped to take effect as soon as possible after 29 March 2019 if no withdrawal
agreement is in place or after any agreed transition period. As the Commodity Securities already comply with
the European wide requirements of the Prospectus Directive, this is not expected to cause any disruption or
alteration to the terms or nature of the Commodity Securities.
The Commodity Securities continue to comply with all applicable laws and regulations. The directors regularly
assess the impact on the Company of the ongoing withdrawal process and consider that the decision to select
an alternate EU Member State regulator substantially mitigates the key risks to the Company.
The board of directors (the “Board”) are not aware of any other developments that might have a significant
effect on the operations of the Company in subsequent financial periods not already disclosed in this report or
the attached financial statements.
Risk Management
Each Metal Security is a debt instrument whose redemption price is linked directly to the value of the relevant
underlying Metal Bullion. The Metal Securities are issued under limited recourse arrangements whereby the
holders have recourse only to the Metal Bullion and not to the Company. In addition, since any movements in
the value of the Metal Bullion are wholly attributable to the holders of the Metal Securities, the Company has
no residual exposure to movements in the value of the Metal Bullion. From a commercial perspective, the
gains or losses on the liability represented by the Metal Securities are matched economically by corresponding
losses or gains attributable to the Metal Bullion (see detail on page 3 regarding the accounting mis-match).
The Company does not retain any net gains or losses or net risk exposures. Further details surrounding the
value of Metal Security and the Metal Bullion are disclosed in note 11.
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ETFS Metal Securities Limited
Directors’ Report (Continued)
Risk Management (continued)
Movements in the value of the underlying Metal Bullion, and thus the value of the Metal Securities, may vary
widely which could have an impact on the demand for the Metal Securities issued by the Company. These
movements are shown in notes 6 and 7.
Dividends
There were no dividends declared or paid in the year (2017: USD Nil). It is the Company’s policy that dividends
will only be declared when the directors are of the opinion that there are sufficient distributable reserves.
Employees
The Company does not have any employees. It is the Company’s policy to use the services of specialist
subcontractors or consultants as far as possible.
Directors’ Remuneration
No director has a service contract with the Company. The directors of the Company who are employees within
the ETFS Capital Limited (formerly ETF Securities Limited) group or within the WisdomTree Investments, Inc
group do not receive separate remuneration in their capacity as directors of the Company. R&H Fund Services
(Jersey) Limited (“R&H” or the “Administrator”) receives a fee in respect of the directors of the Company who
are employees of R&H.
The following directors’ fees have been paid by ManJer on behalf of the Company for the year:
2018 2017
GBP GBP
Graham Tuckwell (Resigned 11 April 2018) Nil Nil
Christopher Foulds (Resigned 2 November 2018) Nil Nil
Steven Ross 8,000 8,000
Joseph Roxburgh (Resigned 11 April 2018) Nil Nil
Gregory Barton (Appointed 11 April 2018) Nil N/a
Peter Ziemba (Appointed 11 April 2018) Nil N/a
Hilary Jones (Appointed 2 November 2018) 1,315 N/a
Gregory Barton, Peter Ziemba and Hilary Jones were not directors of the Company during the year ended 31
December 2017.
Auditor
Following the change in ownership of the Company it is intended to appoint the auditor responsible for the
WisdomTree group as auditor of the Company. A resolution to appoint Ernst & Young LLP as the auditor of
the Company will be proposed at the next Board meeting of the directors.
Corporate Governance
There is no standard code of corporate governance in Jersey. The operations, as previously described in the
directors’ report, are such that the directors do not consider the Company is required to voluntarily apply the
UK Corporate Governance Code.
As the Board is small, there is no nomination committee and appointments of new directors are considered by
the Board as a whole. The Board does not consider it appropriate that directors should be appointed for a
specific term. Furthermore, the structure of the Board is such that it is considered unnecessary to identify a
senior non-executive director.
The constitution of the Board is disclosed on page 2. The Board meets regularly as required by the operations
of the Company, but at least quarterly to review the overall business of the Company and to consider matters
specifically reserved for its review.
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ETFS Metal Securities Limited
Directors’ Report (Continued)
Internal Control
During the year the Company did not have any employees or subsidiaries, and there is no intention that this
will change. The Company, being a special purpose company established for the purpose of issuing Metal
Securities, has not undertaken any business, save for issuing and redeeming Metal Securities, entering into
the required documents and performing the obligations and exercising its rights in relation thereto, since its
incorporation. The Company does not intend to undertake any business other than issuing and redeeming
Metal Securities and performing the obligations and exercising its rights in relation thereto.
The Company is dependent upon ManJer to provide management and administration services to it. ManJer
is licensed under the Financial Services (Jersey) Law 1998 to conduct classes U and Z of Fund Services
Business (ManJer was also licensed to conduct class V of Fund Services Business until 11 April 2018). ManJer
outsources the administration services in respect of the Company to R&H. Documented contractual
arrangements are in place with the Administrator which define the areas where the authority is delegated to
them. The performance of the Manager and Administrator are reviewed on an ongoing basis by the Board
through their review of periodic reports.
ManJer provides management and other services to both the Company and other companies issuing
commodity and index tracking securities.
The Board having reviewed the effectiveness of the internal control systems of the Manager and R&H, and
having a regard to the role of its external auditors, does not consider that there is a need for the Company to
establish its own internal audit function.
Audit Committee
The Board has not established a separate audit committee; instead the Board meets to consider the financial
reporting by the Company, the internal controls, and relations with the external auditors. In addition the Board
reviews the independence and objectivity of the auditor.
Steven Ross
Director
Jersey
11 March 2019
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ETFS Metal Securities Limited
Statement of Directors’ Responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
they have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”) and applicable law.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that
period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law
1991. They are responsible for such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in Jersey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
With regard to Regulation 2004/109/EC of the European Union (the "EU Transparency Directive"), the directors
confirm that to the best of their knowledge that:
• the financial statements for the year ended 31 December 2018 give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company as required by law and in accordance
with IFRS as issued by the IASB; and
• the Directors’ Report gives a fair view of the development of the Company’s business, financial position
and the important events that have occurred during the year and their impact on these financial
statements.
The principal risks and uncertainties faced by the Company are disclosed in note 11 of these financial
statements.
By order of the Board
Steven Ross
Director
11 March 2019
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Independent Auditor’s Report to the Members of
ETFS Metal Securities Limited
Our opinion is unmodified
We have audited the financial statements of ETFS Metal Securities Limited (the
“Company”), which comprise the statement of financial position as at 31 December 2018,
the statements of profit or loss and other comprehensive income, cash flows and changes
in equity for the year then ended, and notes, comprising significant accounting policies and
other explanatory information.
In our opinion, the accompanying financial statements:
— give a true and fair view of the financial position of the Company as at 31 December
2018, and of the Company’s financial performance and cash flows for the year then
ended;
— are prepared in accordance with International Financial Reporting Standards; and
— have been properly prepared in accordance with the requirements of the Companies
(Jersey) Law, 1991.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities are described below. We have fulfilled our
ethical responsibilities under, and are independent of the Company in accordance with, UK
ethical requirements including FRC Ethical Standards as applied to listed entities. We
believe that the audit evidence we have obtained is a sufficient and appropriate basis for our
opinion.
Key Audit Matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional judgment, were of most
significance in the audit of the financial statements and include the most significant
assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, we do not provide a separate opinion on these matters. In
arriving at our audit opinion above, the key audit matters, were as follows:
8
The risk Our response
Valuation of Metal Basis: Our audit procedures included:
Bullion
99% of the Company’s total assets at 31 Internal Controls: Assessed the
£8,618,842,192; December 2018 were invested in Metal design and implementation of
(2017: £8,394,848,034) Bullion (2017 99%). controls over the valuation of Metal
Bullion.
Refer to the accounting Metal Bullion acts as collateral for the
policy in note 2, and to Metal Securities issued by the Company. Independent confirmation:
disclosures in notes 6 and Metal Bullion is accounted for at fair value. Obtained independent confirmation
11. from the custodian of the value of
The Company determines fair value by Metal Bullion held in custody at the
revaluing the quantity of Metal Bullion held reporting date.
at the reporting date to the last market
price published by the London Bullion Independent evaluation: Compared
Market Association (LBMA). the value of Metal Bullion held for
consistency with the Metal
Entitlement of the Metal
Risk: Securities. Assessed the
The reported fair value of Metal Bullion appropriateness of the pricing
may be materially misstated. source and considered whether
the LBMA market prices represent
fair value in accordance with IFRS.
Performed an independent
recalculation of fair value based on
published market prices.
Assessing disclosures: We
assessed the fair value disclosures
in the financial statements for
compliance with IFRS
requirements.
9
The risk Our response
Valuation of Metal Basis: Our audit procedures included:
Securities
The issuance of Metal Securities is central Internal Controls: Assessed the
£8,628,692,295; to the Company’s principal activity. Metal design and implementation of
(2017: £8,402,425,709) Securities allow investors to gain exposure controls over the valuation of Metal
to movements in the market price of Securities.
Refer to the accounting bullion without needing to take physical
policy in note 2, and to delivery. Independent evaluation: Assessed
disclosures in notes 7 and the appropriateness of the pricing
11. Metal Securities are accounted for at fair source and considered whether
value. the market price represents fair
value in accordance with IFRS.
The Company determines fair value by Performed an independent
revaluing the Metal Securities in issue at evaluation of fair value based on
the reporting date to prices quoted for the published market prices, and
Metal Securities in active markets compared to those determined by
the Company.
Risk:
Assessing disclosures: Assessed
The reported value of Metal Securities may the fair value disclosures in the
be materially misstated. financial statements for
compliance with IFRS
requirements.
10
Our application of materiality and an overview of the scope of our audit
Materiality for the financial statements as a whole was set at USD43 million, determined
with reference to a benchmark of total assets of USD8,624,836,776 as at 31 December
2018, of which it represents 0.5% (2017: 0.5%).
We reported to the Board of Directors any corrected or uncorrected misstatements
identified exceeding USD2.15 million, in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specified above, which
has informed our identification of significant risks of material misstatement and the
associated audit procedures performed in those areas as detailed above.
We have nothing to report on going concern
We are required to report to you if we have concluded that the use of the going concern
basis of accounting is inappropriate or there is an undisclosed material uncertainty that may
cast significant doubt over the use of that basis for a period of at least twelve months from
the date of approval of the financial statements. We have nothing to report in these
respects.
We have nothing to report on the other information in the Directors’
Report
The directors are responsible for the other information presented in the Directors’ Report
together with the financial statements. Our opinion on the financial statements does not
cover the other information and we do not express an audit opinion or any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether,
based on our financial statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or our audit knowledge. Based
solely on that work we have not identified material misstatements in the other information.
We have nothing to report on other matters on which we are required to
report by exception
We have nothing to report in respect of the following matters where the Companies
(Jersey) Law, 1991 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the Company;
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations we require for our audit.
11
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 7, the directors are responsible
for: the preparation of the financial statements including being satisfied that they give a true
and fair view; such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or
error; and assessing the Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of
accounting unless they either intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but
does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website
at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by persons other
than the Company’s members as a body
This report is made solely to the Company’s members, as a body, in accordance with Article
113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we
might state to the Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Steven Hunt
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognized Auditors, Jersey
11 March 2019
12
ETFS Metal Securities Limited
Statement of Profit or Loss and Other Comprehensive Income
Year ended 31 December
2018 2017
Notes USD USD
Revenue 3 32,456,189 32,043,816
Expenses 3 (32,456,189) (32,043,816)
Operating Result 3 - -
Net (Loss) / Gain Arising on Contractual and Fair
Value of Metal Bullion 6 (170,484,092) 842,995,877
Net Gain / (Loss) Arising on Fair Value of Metal
Securities 7 168,211,663 (850,490,162)
Result and Total Comprehensive Income for the
Year (2,272,429) (7,494,285)
1Adjustment from Market Value to Contractual Value
of Metal Securities 2 2,272,429 7,494,285
Adjusted Result and Total Comprehensive Income
for the Year - -
The directors consider the Company’s activities as continuing.
1An explanation of the non-statutory adjustment is set out on page 19. This represents the movement in the difference
between the Contractual Value of Metal Bullion and the market price of Metal Securities.
The notes on pages 17 to 27 form part of these financial statements
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ETFS Metal Securities Limited
Statement of Financial Position
As at 31 December
2018 2017
Notes USD USD
Current Assets
Trade and Other Receivables 5 2,850,345 2,871,898
Metal Bullion 6 8,618,842,192 8,394,848,034
Amounts Receivable on Assets Awaiting Settlement 6 238,506 8,657,284
Amounts Receivable on Securities Awaiting
Settlement 7 2,905,733 -
Total Assets 8,624,836,776 8,406,377,216
Current Liabilities
Metal Securities 7 8,628,692,295 8,402,425,709
Amounts Payable on Assets Awaiting Settlement 6 2,905,733 -
Amounts Payable on Securities Awaiting Settlement 7 238,506 8,657,284
Trade and Other Payables 8 2,850,342 2,871,894
Total Liabilities 8,634,686,876 8,413,954,887
Equity
Stated Capital 9 4 4
Revaluation Reserve (9,850,104) (7,577,675)
Total Equity (9,850,100) (7,577,671)
Total Equity and Liabilities 8,624,836,776 8,406,377,216
The financial statements on pages 13 to 27 were approved and authorised for issue by the board of directors
and signed on its behalf on 11 March 2019.
Steven Ross
Director
The notes on pages 17 to 27 form part of these financial statements
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ETFS Metal Securities Limited
Statement of Cash Flows
Year ended 31 December
2018 2017
USD USD
Operating Result for the Year - -
Changes in Operating Assets and Liabilities
Decrease/(Increase) in Receivables 21,553 (292,467)
(Decrease)/Increase in Payables (21,553) 292,467
Cash Generated from Operating Activities - -
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents at the Beginning of the
Year - -
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents at the End of the Year - -
Metal Securities are issued and redeemed by transfer of Metal Bullion and have been netted off in the
Statement of Cash Flows.
The notes on pages 17 to 27 form part of these financial statements
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ETFS Metal Securities Limited
Statement of Changes in Equity
Stated Retained Revaluation Total Adjusted
Capital Earnings Reserve 2 Equity Total Equity
Notes USD USD USD USD USD
Opening Balance at 1 January 2017 4 - (83,390) (83,386) 4
Result and Total Comprehensive Income for the Year - (7,494,285) - (7,494,285) (7,494,285)
Transfer to Revaluation Reserve 7 - 7,494,285 (7,494,285) - -
3 Adjustment from Market Value to Contractual Value of
Metal Securities 7 - - - - 7,494,285
Balance at 31 December 2017 4 - (7,577,675) (7,577,671) 4
Opening Balance at 1 January 2018 4 - (7,577,675) (7,577,671) 4
Result and Total Comprehensive Income for the Year - (2,272,429) - (2,272,429) (2,272,429)
Transfer to Revaluation Reserve 7 - 2,272,429 (2,272,429) - -
3 Adjustment from Market Value to Contractual Value of
Metal Securities 7 - - - - 2,272,429
Balance at 31 December 2018 4 - (9,850,104) (9,850,100) 4
2 This represents the difference between the Contractual Value of Metal Bullion and the market price of Metal Securities.
3 An explanation of the non-statutory adjustment is set out on page 19.
The notes on pages 17 to 27 form part of these financial statements
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ETFS Metal Securities Limited
Notes to the Financial Statements
1. General Information
ETFS Metal Securities Limited (the “Company”) is a company incorporated in Jersey. The address of the
registered office is Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW.
The purpose of the Company is to provide a vehicle that permits trading of Metal Securities. The Company
does not make gains from trading in the underlying Metal Bullion. The Metal Securities are issued under
limited recourse arrangements whereby the Company has no residual exposure to the value of the Metal
Bullion, therefore from a commercial perspective gains and losses in respect of Metal Bullion will always be
offset by a corresponding loss or gain on the Metal Securities. Further details regarding the risks of the
Company are disclosed in note 11.
Exchange traded products are not typically actively managed, are significantly lower in cost when compared
to actively managed mutual funds and are easily accessible to investors. No active trading or management of
Metal Bullion is required of the Company because the Company only receives or delivers Metal Bullion on the
issue and redemption of Metal Securities, and only holds Metal Bullion as determined by the Metal Entitlement
of each class of Metals Security to support the Metal Securities.
The Company is entitled to:
(1) a Management Fee which is calculated by reducing the Metal Entitlement of each class of Metal
Security on a daily basis by an agreed amount; and
(2) creation and redemption fees on the issue and redemption of the Metal Securities.
No creation or redemption fees are payable to the Company when investors trade in the Metal Securities on a
listed market such as the London Stock Exchange. Creation and redemption fees may also be waived with
certain approved persons where applicable.
The Company has entered into a service agreement with ETFS Management Company (Jersey) Limited
(“ManJer” or the “Manager”), whereby ManJer is responsible for supplying or procuring the supply of all
management and administration services required by the Company, (including marketing) as well as the
payment of costs relating to the listing and issuance of Metal Securities. In return for these services, the
Company pays ManJer an amount equal to the Management Fee and the creation and redemption fees earned
(the “ManJer Fee”). As a result there are no operating profits or losses recognised through the Company.
2. Accounting Policies
The main accounting policies of the Company are described below.
Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRSs”) as issued by the International Accounting Standards Board (“IASB”), and interpretations issued by
the International Financial Reporting Interpretations Committee of the IASB. The financial statements have
been prepared under the historical cost convention, as modified by the revaluation of financial assets and
financial liabilities held at fair value through profit or loss.
Critical Accounting Estimates and Judgements
The presentation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Company’s
accounting policies.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Critical Accounting Estimates and Judgements (continued)
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities.
Estimates are continually evaluated and based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The only key
accounting judgement required to prepare these financial statements is in respect of the valuation of Metal
Bullion and Metal Securities held at fair value through profit or loss as disclosed in notes 6 and 7. Actual
results could vary from these estimates.
Going Concern
The nature of the Company’s business dictates that the outstanding Metal Securities may be redeemed at any
time by the holder and in certain circumstances may be compulsorily redeemed by the Company. Generally,
only security holders who have entered into an authorised participant agreement with the Company
(“Authorised Participant”) can submit applications and redemptions directly with the Company. As the
redemption of Metal Securities will always coincide with the transfer of an equal amount of Metal Bullion, no
net liquidity risk is considered to arise. All other expenses are met by ManJer; therefore the directors consider
the Company to be a going concern and have prepared the financial statements on this basis.
On 11 April 2018 WisdomTree Investments, Inc (an exchange-traded product sponsor and asset manager)
acquired ETFS Capital Limited’s (formerly ETF Securities Limited) European exchange-traded product
business as a going concern, which includes the Company. Following completion of the acquisition, the
Company continues as a going concern.
Accounting Standards
(a) Standards, amendments and interpretations adopted in the year:
In preparing the financial statements the Company has adopted all new or revised Standards and
Interpretations, including:
• IFRS 9 Financial Instruments
• IFRS 15 Revenues
Under IAS 39 Metal Securities and Metal Bullion were designated as financial instruments at fair value
through profit or loss and loans and receivables were measured at amortised cost. Following the adoption
of IFRS 9 there has been no change in the classification or measurement of any financial assets or
liabilities held by the Company.
Of those Standards and Interpretations adopted in the current year, none have resulted in any significant
effect on these financial statements.
(b) New and revised IFRSs in issue but not yet effective:
The Company has not applied the following new and revised IFRSs that have been issued but are not
yet effective:
• IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019)
• IFRS 17 Insurance Contracts (effective for annual periods beginning on or after 1 January 2021)
• IAS 28 Investments in Associates and Joint Ventures (effective for annual periods beginning on or
after 1 January 2019)
• Annual Improvements to IFRS
The directors do not expect the adoption of the above standards, amendments and interpretations that
are in issue but not yet effective will have a material impact on the financial statements of the Company
in future periods.
The directors have considered other standards and interpretations in issue but not effective and concluded
that they would not have a material impact on the future financial periods when they become available.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Metal Securities
i) Issue and Redemption
The Company has entered into a Trust Instrument with The Law Debenture Trust Corporation plc (“Law
Debenture”) to permit the Company to issue Metal Securities. The conditions of issue are set out in the
Trust Instrument. Each time a Metal Security is issued or redeemed by the Company a corresponding
amount of Metal Bullion is transferred into or from the relevant secured account held by the Custodian.
Financial liabilities are recognised and de-recognised on the transaction date.
ii) Pricing
Metal Bullion is priced on a daily basis based on the Metal Entitlement of each class of security and the
value of the Bullion using the appropriate fixing price provided by the London Bullion Market Association
(“LBMA”). This price is calculated based on the formula set out in the Prospectus, and is referred to as
the ‘Contractual Value’ and is considered to be the fair value of the Metal Bullion Transactions.
IFRS 13 requires the Company to identify the principal market and to utilise the available market price
within that principal market. The directors consider that the stock exchanges where the Metal Securities
are listed to be the principal market and as a result the fair value of the Metal Securities is the on-
exchange price as quoted on those stock exchanges demonstrating active trading. The Metal Securities
are priced using the mid-market price on the Statement of Financial Position date taken just at the time
the relevant bullion fix price is set.
Consequently a difference arises between the value of Metal Bullion (at Contractual Value) and Metal
Securities (at market value) presented in the Statement of Financial Position. This difference is reversed
on a subsequent redemption of the Metal Securities and transfer of the corresponding Metal Bullion.
iii) Designation at fair value through Profit or Loss
Metal Securities comprise a financial instrument and are designated at fair value through profit or loss
upon initial recognition. This is in order to enable gains or losses on both the Metal Security and Metal
Bullion to be recorded in the Statement of Profit or Loss and Other Comprehensive Income.
Through the mis-matched accounting values, the results of the Company reflect a gain or loss which
represents the movement in the cumulative difference between the value of the Metal Bullion and the
market price of Metal Securities. This gain or loss is transferred to a Revaluation Reserve which is non-
distributable. The results of the Company are adjusted through the presentation of a non-statutory
movement entitled ‘Adjustment from Market Value to Contractual Value (as set out in the Prospectus) of
Metal Securities’
Metal Bullion
The Company holds Metal Bullion equal to the amount due to holders of Metal Securities solely for the
purposes of meeting its obligations under the Metal Securities. The Metal Bullion held is marked to fair value
and movements are recorded through profit or loss.
The fair value is calculated using the latest fixing price provided by the LBMA.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Metal Bullion and Metal Securities Awaiting Settlement
The issue and redemption of Metal Securities, and the transfer in and out of Metal Bullion, is accounted for on
the transaction date. Where settlement pricing is applied, the transaction will not settle until two days after the
transaction date. Where transactions are awaiting settlement at the year end, the monetary value of the Metal
Bullion and the Metal Securities due to be settled is separately disclosed within the relevant assets and
liabilities on the Statement of Financial Position.
Revenue Recognition
Revenue is recognised to the extent that the economic benefits will flow to the Company and the revenue can
be reliably measured. Revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, and other sales taxes or duty.
Fees received for the issue and redemption of Metal Securities are recognised at the date on which the
transaction becomes legally binding. All other income and expenses are recognised on an accruals basis.
Loans and Receivables
The loans and receivables are non-derivative financial assets with a fixed payment amount and are not quoted
in an active market. After initial measurement the loans and receivables are carried at amortised cost using
the effective interest method less any allowance for expected credit losses. The effective interest method is a
method of calculating the amortised cost of an instrument and of allocating interest over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net
carrying amount on initial recognition. Impairment losses, including reversals of impairment losses and
impairment gains, are presented in the statement of profit or loss and other comprehensive income.
Metal Bullion Receivable and Payable
Management Fees receivable are accrued by reducing the Metal Entitlement of each class of Metal Security
on a daily basis by an agreed amount. These fees are receivable in Metal Bullion, recorded at fair value at the
Statement of Financial Position date using the latest quote provided by the LBMA. Movements in fair value
are recorded through profit or loss.
Management Fees payable are also accrued based on the income accrued in accordance with the agreement
with ManJer. These fees (relating to Management Fees received) are payable in Metal Bullion, recorded at
fair value at the Statement of Financial Position date using the latest quote provided by the LBMA. Movements
in fair value are accounted for through profit or loss.
Foreign Currency Translation
The financial statements of the Company are presented in the currency of the primary economic environment
in which it operates (its functional currency). For the purpose of the financial statements, the results and
financial position of the Company are expressed in United States Dollars, which is the functional currency of
the Company and the presentational currency of the financial statements.
Monetary assets and liabilities denominated in foreign currencies at the year end date are translated at rates
ruling at that date. Creation and redemption fees are translated at the average rate for the month in which
they are incurred. The resulting differences are accounted for through profit or loss.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
2. Accounting Policies (continued)
Segmental Reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the
Company that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) in order to allocate
resources to the segments and to assess their performance. The CODM has been determined as the board
of directors. A segment is a distinguishable component of the Company that is engaged either in providing
products or services (business segment), or in providing products and services within a particular economic
environment (geographical segment), which is subject to risks and rewards that are different from those of
other segments.
The Company has not provided segmental information as the Company has only one business or product
group, precious metals, and one geographical segment which is Europe. In addition the Company has no
single major customer from which greater than 10% of revenue is generated. All information relevant to the
understanding of the Company’s activities is included in these financial statements.
3. Operating Result
Operating result for the year comprised:
Year ended 31 December
2018 2017
USD USD
Creation and Redemption Fees 37,531 56,861
Management Fees 32,418,658 31,986,955
Total Revenue 32,456,189 32,043,816
ManJer Fees (32,456,189) (32,043,816)
Total Operating Expenses (32,456,189) (32,043,816)
Operating Result - -
Audit Fees for the year of GBP 20,000 will be met by ManJer (2017: GBP 18,818).
4. Taxation
The Company is subject to Jersey Income Tax. During the year the Jersey Income Tax rate applicable to the
Company is zero percent (2017: zero percent).
5. Trade and Other Receivables
As at 31 December
2018 2017
USD USD
Management Fees 2,840,177 2,840,097
Creation and Redemption Fees 10,164 31,797
Receivable from Related Party 4 4
2,850,345 2,871,898
The fair value of these receivables is equal to the carrying value.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
6. Metal Bullion
As at 31 December
2018 2017
USD USD
Net (Loss) / Gain Arising on Contractual and Fair Value of
Metal Bullion (170,484,092) 842,995,877
Metal Bullion at Fair Value 8,618,842,192 8,394,848,034
As at 31 December 2018, there were certain amounts of Metal Bullion awaiting the settlement in respect of the
creation or redemption of Metal Securities with transaction dates before the year end and settlement dates in
the following year:
• The monetary amount receivable as a result of unsettled redemptions is USD 238,506 (2017: USD
8,657,284).
• The monetary amount payable as a result of unsettled creations is USD 2,905,733 (2017: USD Nil).
All Metal Bullion assets have been valued using the AM fix on 31 December 2018 as quoted by the LBMA
being the last fix prices available for the year.
7. Metal Securities
Whilst the Metal Securities are quoted on the open market, the Company’s ultimate liability relates to its
contractual obligations to issue and redeem Metal Securities in exchange for Metal Bullion as determined by
the Metal Entitlement of each class of Metal Security on each trading day. The monetary value of each creation
and redemption of Metal Securities is recorded using the price provided by the LBMA on the transaction date,
and is the “Contractual Value”. Therefore, the issue and redemption of Metal Securities is recorded at a value
that corresponds to the value of the Metal Bullion transferred in respect of the issue and redemption. As a
result the Company has no net exposure to gains or losses on the Metal Securities and Metal Bullion.
The Company measures the Metal Securities at their market value in accordance with IFRS 13 rather than at
the Contractual Value described above. The market value is deemed to be the prices quoted on stock
exchanges or other markets where the Metal Securities are listed or traded. However Metal Bullion is valued
based on the Metal Entitlement (which is calculated in accordance with an agreed formula published in the
Prospectus) of each class of Metal Securities, and applying the latest quoted bullion prices published by the
LBMA.
The fair values and changes thereof during the year based on prices available on the open market as
recognised in the financial statements are:
As at 31 December
2018 2017
USD USD
Net Gain / (Loss) Arising on Fair Value of Metal Securities 168,211,663 (850,490,162)
Metal Securities at Fair Value 8,628,692,295 8,402,425,709
The contractual redemption values and changes thereof during the year based on the contractual settlement
values are:
As at 31 December
2018 2017
USD USD
Change in Contractual Redemption Value for the Year 170,484,092 (842,995,877)
Metal Securities at Contractual Redemption Value 8,618,842,192 8,394,848,034
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
7. Metal Securities (continued)
The gain or loss on the difference between the value of the Metal Bullion and the market price of Metal
Securities would be reversed on a subsequent redemption of the Metal Securities and transfer of the
corresponding Metal Bullion.
The mismatched accounting values are as shown below and represent the non-statutory adjustment presented
in the Statement of Profit or Loss and Other Comprehensive Income:
Year ended 31 December
2018 2017
USD USD
Net (Loss) / Gain Arising on Contractual and Fair Value of
Metal Bullion (170,484,092) 842,995,877
Net Gain / (Loss) Arising on Fair Value of Metal Securities 168,211,663 (850,490,162)
(2,272,429) (7,494,285)
As at 31 December 2018, there were certain Metal Securities awaiting settlement in respect of creations or
redemptions with transaction dates before the year end and settlement dates in the following year:
• The monetary amount receivable as a result of unsettled creations of Metal Securities is
USD 2,905,733 (2017: USD Nil).
• The monetary amount payable as a result of unsettled redemptions of Metal Securities is USD 238,506
(2017: USD 8,657,284).
8. Trade and Other Payables
As at 31 December
2018 2017
USD USD
ManJer Fees Payable 2,850,342 2,871,894
The fair value of these payables is equal to the carrying value.
9. Stated Capital
As at 31 December
2018 2017
USD USD
2 Shares of Nil Par Value, Issued at GBP 1 Each 4 4
The Company can issue an unlimited capital of nil par value shares in accordance with its Memorandum of
Association.
All Shares issued by the Company carry one vote per Share without restriction and carry the right to dividends.
All Shares are held by ETFS Holdings (Jersey) Limited (“HoldCo”). ETFS Capital Limited (formerly ETF
Securities Limited) was the parent company of HoldCo until completion of the acquisition by WisdomTree
Investments, Inc (“WisdomTree”) on 11 April 2018, on which date, WisdomTree became the ultimate parent.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
10. Related Party Disclosures
Entities and individuals which have a significant influence over the Company, either through the ownership or
by virtue of being a director of the Company, are related parties.
Fees charged by ManJer during the year:
Year ended 31 December
2018 2017
USD USD
ManJer Fees 32,456,189 32,043,816
The following balances were due to ManJer at the year end:
As at 31 December
2018 2017
USD USD
ManJer Fees Payable 2,850,341 2,871,894
At 31 December 2018, USD 4 is receivable from ManJer (2017: USD 4).
As disclosed in the Directors’ Report, ManJer paid Directors’ Fees in respect of the Company of GBP 9,315
(2017: GBP 8,000).
Steven Ross and Hilary Jones are directors of R&H Fund Services (Jersey) Limited (“R&H” or the
“Administrator”) and Steven Ross is a partner of Rawlinson & Hunter, Jersey Partnership which wholly owns
R&H. Christopher Foulds was the Compliance Officer of ManJer, and was an employee of ETFS Capital
Limited (formerly ETF Securities Limited) until 11 April 2018. On 11 April 2018 Christopher Foulds joined R&H
and he resigned on 2 November 2018. During the year, R&H charged ManJer administration fees in respect
of the Company of GBP 117,812 (2017: GBP 93,750), of which GBP 31,000 (2017: GBP 23,500) was
outstanding at the year end.
Gregory Barton and Peter Ziemba are executive officers of WisdomTree Investments, Inc.
Graham Tuckwell is a director of ETFS Capital Limited (formerly ETF Securities Limited) and was a director of
ManJer and HoldCo until 11 April 2018. Joseph Roxburgh was a director of ManJer and HoldCo and the
Company Secretary of the Company until 11 April 2018.
11. Financial Risk Management
The Metal Securities are subject to normal market fluctuations and other risks inherent in investing in securities
and other financial instruments. There can be no assurance that any appreciation in the value of securities
will occur, and the capital value of an investor’s original investment is not guaranteed. The value of investments
may go down as well as up, and an investor may not get back the original amount invested.
The Company is exposed to a number of risks arising from its activities. The information provided below is not
intended to be a comprehensive summary of all the risks associated with the Metal Securities and investors
should refer to the most recent Prospectus for a detailed summary of the risks inherent in investing in the Metal
Securities. Any data provided should not be used or interpreted as a basis for future forecast or investment
performance.
The risk management policies employed by the Company to manage these are discussed below.
(a) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities as they fall due. When Metal Securities are redeemed, the Company returns the
corresponding amount of Metal Bullion determined by the Metal Entitlement of those Metal Securities, therefore
the redemption of Metal Securities would not impact the liquidity of the Company.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
11. Financial Risk Management (continued)
(b) Credit Risk
Credit risk primarily refers to the risk that Authorised Participants or the Custodian will default on its contractual
obligations resulting in financial loss.
Credit risk is managed by the Company by only dealing with Authorised Participants who are believed to be
creditworthy. In the event the authorised participants fail to complete their obligation, no Metal Securities will
be created therefore the Company does not have the risk of loss of the amount expected to be received.
Credit risk also includes custodial risk. The custodian is not required to take out insurance and neither is the
Trustee. Accordingly, there is a risk that the secured Metal Bullion could be lost, stolen or damaged and the
Company would not be able to satisfy its obligations in respect of the Metal Securities.
The Board monitors credit risk exposure to ensure the Company’s exposure is managed.
(c) Settlement Risk
Settlement risk primarily refers to the risk that an Authorised Participant will default on its contractual
obligations resulting in financial loss.
The directors believe that settlement risk would only be caused by the risk of the Company’s trading
counterparty not delivering Metal Bullion or Metal Securities on the settlement date. The Metal Securities
settle through the CREST system. The directors feel that this risk is mitigated as Metal Securities are not
issued until the required amount of Metal Bullion has been received in the Custodian account, and Metal Bullion
is not transferred until the relevant Metal Securities have been delivered in CREST. As a result each
transaction does not settle until both parties have fulfilled their contractual obligations.
Amounts outstanding in respect of positions yet to settle are disclosed in notes 6 and 7.
(d) Market Risk
Market risk is the risk that changes in market prices (such as foreign exchange rates, interest rates, bullion
prices and equity prices) will affect the Company’s income or the value of its financial instruments held or
issued.
i) Price Risk
The value of the Company’s liability in respect of the Metal Securities fluctuates according to the Metal
Bullion prices and the risk of such change in price is managed by the Company by holding Metal Bullion
in the same quantity as its liability. Therefore, the Company bears no financial risk from a change in the
price of Metal Bullion. Refer to note 7 for the further details regarding fair values.
However, there is an inherent risk from the point of view of investors as the price of Metal Bullion and the
value of the Metal Securities may vary widely due to, amongst other things, changing supply or demand
for Metal Bullion, government and monetary policy or intervention and global or regional political, economic
or financial events.
The market price of Metal Securities is a function of supply and demand amongst investors wishing to buy
and sell Metal Securities and the bid or offer spread that the market makers are willing to quote. This is
highlighted in note 7, and below under the Fair Value Hierarchy.
ii) Interest Rate Risk
The Company does not have significant exposure to interest rate risk as neither the Metal Bullion or the
Metal Securities bear any interest.
iii) Currency Risk
The directors do not consider the Company to have a significant exposure to currency risk arising from the
current economic uncertainties facing a number of countries around the world as the gains or losses on
the liability represented by the Metal Securities are matched economically by corresponding losses or
gains attributable to the Metal Bullion.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
11. Financial Risk Management (continued)
(e) Capital Management
The Company’s principal activity is the issue and listing of Metal Securities. These securities are issued and
redeemed as demand requires. The Company holds a corresponding amount of Metal Bullion which matches
the total liability of the Metal Securities issued. ManJer supplies or arranges the supply of all management
and administration services to the Company and pays all management and administration costs of the
Company, including Trustee and Custodian Fees. In return for these services the Company pays a
Management Fee, which under the terms of the service agreement is equal to the aggregate of the
Management Fee and creation and redemption fees earned. The Company is not subject to any capital
requirements imposed by a regulator and there were no changes in the Company’s approach to capital
management during the year.
As all Metal Securities on issue are supported by an equivalent amount of physical bullion held by the
Custodian and the running costs of the Company were paid by ManJer, the directors of the Company consider
the capital management and its current capital resources are adequate to maintain the ongoing listing and
issue of Metal Securities.
(f) Sensitivity Analysis
IFRS 7 requires disclosure of a sensitivity analysis for each type of market risk to which the entity is exposed
to at the reporting date, showing how profit or loss and equity would have been affected by a reasonably
possible change to the relevant risk variable.
The Company’s rights and liability in respect of Metal Securities relates to its contractual obligations to issue
and redeem Metal Securities in exchange for Metal Bullion as determined by the Metal Entitlement of each
class of Metal Security on each trading day. The monetary value of each creation and redemption of Metal
Securities is recorded using the price provided by the LBMA on the transaction date. As a result the Company’s
contractual and economic monetary liability in connection with the issue of Metal Securities is matched by
movements in the monetary value of the corresponding Metal Bullion. Consequently, the Company does not
have any net exposure to market price risk. Therefore, in the directors’ opinion, no sensitivity analysis is
required to be disclosed.
(g) Fair Value Hierarchy
The levels in the hierarchy are defined as follows:
• Level 1 fair value based on quoted prices in active markets for identical assets.
• Level 2 fair values based on valuation techniques using observable inputs other than quoted
prices within level 1.
• Level 3 fair values based on valuation techniques using inputs that are not based on observable
market data.
Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the
fair value measurement of each relevant asset/liability.
The Company is required to utilise the available market price as the Metal Securities are quoted and actively
traded on the open market. Therefore Metal Securities are classified as Level 1 financial liabilities.
The Company holds Metal Bullion to support the Metal Securities as determined by the Metal Entitlement
(which is calculated in accordance with an agreed formula published in the Prospectus). Metal Bullion is
marked to fair value using the latest quote provided by the LBMA. The Company has contractual obligations
to issue and redeem Metal Securities in exchange for Metal Bullion as determined by the Metal Entitlement of
each class of Metal Security on each trading day. The monetary value of each creation and redemption of
Metal Securities is recorded using the price provided by the LBMA on the transaction date applied to that Metal
Entitlement. Therefore, Metal Bullion is classified as a level 2 asset, as the value is calculated using third party
pricing sources supported by observable, verifiable inputs.
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ETFS Metal Securities Limited
Notes to the Financial Statements (Continued)
11. Financial Risk Management (continued)
(g) Fair Value Hierarchy (continued)
The categorisation of the Company’s assets and (liabilities) are as shown below:
Fair Value as at 31 December
2018 2017
USD USD
Level 1
Metal Securities (8,628,692,295) (8,402,425,709)
Level 2
Metal Bullion 8,618,842,192 8,394,848,034
The Metal Securities and the Metal Bullion are recognised at fair value through profit or loss upon initial
recognition in line with the Company’s accounting policy. There are no assets or liabilities classified in level
3. There were no reclassifications during the year.
Metal Bullion is not considered to be a financial asset; however, it has been presented here for purposes of
consistency with prior periods and to show a matching between assets and liabilities.
12. Ultimate Controlling Party
The immediate parent company is HoldCo, a Jersey registered company. Following completion of the
acquisition which included HoldCo on 11 April 2018 the ultimate controlling party is WisdomTree Investments,
Inc. Prior to 11 April 2018 Graham Tuckwell was the ultimate controlling party of HoldCo through his majority
shareholding in ETFS Capital Limited (formerly ETF Securities Limited).
The value of the Metal Bullion backing the Metal Securities is wholly attributable to the holders of the Metal
Securities.
13. Events Occurring After the Reporting Period
No significant events have occurred since the end of the reporting period up to the date of signing the Financial
Statements which would impact on the financial position of the Company disclosed in the Statement of
Financial Position as at 31 December 2018 or on the results and cash flows of the Company for the year ended
on that date.
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The intelligent
alternative.
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